Responsible and Ethical Business Practice: An Analysis of BP PLC

Responsible and Ethical Business Practice: An Analysis of BP PLC
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Responsible and Ethical Business Practice: An Analysis of BP PLC
Context
Man has wrestled with questions of right and wrong for millennia to discover the best ways to deal with moral dilemmas. Despite this, humanity have only recently started applying ethics in business. Businesses primarily cared about profit making at the expense of ethical, environmental, and social considerations. However, things have changed over time consequently changing the expectations of businesses, with society demanding ethical and sustainable practices (Carroll et al., 2022). As Brinkmann (2021) underscores, the industrial revolution transformed business, ushering in an era of mass production and consumption. It also brought various ethical challenges, like exploitation of workers, environmental degradation, and unfair business practices. Hence, the need for ethical principles in business became increasingly apparent. Today, businesses are expected to operate in a socially responsible and ethical manner, taking into account their impact on employees, customers, communities, and the environment. De Bakker et al. (2019) highlight that this includes adhering to ethical standards, like honesty, integrity, and transparency, and implementing sustainable practices that minimize harm to people and the planet (p. 350). This case study draws upon various ethical elements to analyze the British oil and gas company, BP PLC, to explore its ethical application in its operations.
BP is a British multinational oil and gas company (and one of the largest companies in this sector worldwide) headquartered in London, UK. The company operates in all oil and gas industry aspects, including exploration, production, refining, and distribution. The company operates in over 70 countries worldwide, focusing on upstream and downstream activities (Elsayed & Ammar, 2020). Its products are used in many applications, including transportation, heating, electricity generation, and other industrial applications. BP also invests in renewable energy sources, such as wind and solar power, as part of its commitment to sustainability.
As Elsayed and Ammar (2020), the company is committed to sustainability and responsibility. Its strategy for conducting responsible business is underpinned by values that encourage ethical conduct, social responsibility, and environmental stewardship. The company values commitment to safety, transparency, accountability, and respect for human rights (Agudelo et al., 2020; Ruka & Rashidirad, 2019). It appreciates how crucial it is to include stakeholders and work together to overcome the issues facing the energy sector.
As such, BP has implemented various initiatives and programs to operationalize its principles. The company has invested heavily in renewable energy and is working to reduce its carbon footprint through low-carbon technologies and increased efficiency. Ansari et al. (2022) highlighted that BP recognized the role of oil and gas in carbon emissions and the role of low-carbon innovations in combating anthropogenic climate change trends. BP has also set ambitious targets to reduce greenhouse gas emissions, improve safety performance, and promote diversity and inclusion. According to a 2020 statistical analysis by the company, already existing low and zero-emissions technologies could remedy or mediate carbon emissions’ impacts on the climate (Lin & Li, 2021). Scaling these technologies will be instrumental in averting the looming danger threatening life on earth (He et al., 2020; Wang et al., 2021). The company has partnered with local communities and NGOs to address social and environmental issues. It has also implemented a comprehensive system of governance to ensure its operations are conducted responsibly and sustainably. Gurzawska (2020) stated that these partnerships stem from BP’s appreciation that social responsibility throughout its supply chain must be a coproduction of its stakeholders, including private and public actors. Through its commitment to responsible business, BP creates value for its stakeholders while contributing to a more sustainable future.
BP has adopted a responsible and ethical business approach in its operations. Given that the company is a behemoth, its ethical standards are rooted in multiple ethical theories, including normative, behavioral, and management ethics. Normative ethics inform its adherence to moral standards and values deemed universally acceptable, as evident in BP’s commitment to sustainability, environmental protection, and social responsibility (Elsayed & Ammar, 2020). On the other hand, BP’s behavioral ethics inform its consideration of psychological and social factors that influence ethical decision-making. To this end, BP has implemented various measures to strengthen its ethical culture and promote ethical employee behaviour. For instance, the company has established a code of conduct outlining its values, principles, and expected behaviors (Valle, 2021). Valle (2021) found that BP also provides regular training and awareness programs to its employees to promote ethical conduct. It has also established various channels for reporting unethical behavior.
Finally, management ethics guide its moral principles and values that guide the behavior of its managers with an emphasis on honesty, fairness, responsibility, transparency, and sustainability. BP has demonstrated a strong commitment to responsible and ethical business practices. For example, the company has implemented various sustainability initiatives to reduce its carbon footprint, protect the environment, and promote sustainable resource management (Elsayed & Ammar, 2020). According to Adunbi (2020), BP has also increased transparency in its reporting and disclosure practices, providing stakeholders with information about its operations. Additionally, BP has demonstrated a strong commitment to safety and responsibility, investing in safety measures and emergency response systems to minimize the risk of accidents.
Ethical Underpinning
BP has been involved in various incidents that have resulted in negative social and environmental impacts and reputational damage to the company. Among those incidents, the Deepwater Horizon oil spill of 2010 was perhaps the most significant, casting a new light on the oil industry’s ethical, social, and environmental impacts (Alm & Brown, 2021). Critics raised concerns about the industry’s Corporate Social Responsibility (CSR). Companies are responsible to their stakeholders to behave ethically and sustainably (Gheraia et al., 2019; Rudyanto & Siregar, 2018). Indeed, various aspects of CSR have become critical to the company’s bottom line as customers are increasingly willing to pay a premium for ethically and sustainably produced products.
The Deepwater Horizon oil spill exposed BP’s violations of CSR principles. According to Alm and Brown (2021), the disaster resulted in the deaths of 11 workers and caused extensive environmental damage. The spill exposed the company’s environmental infractions which caused significant harm to marine life, habitats, and ecosystems, and had long-lasting repercussions on the environment (Alm & Brown, 2021). The company failed to follow proper safety protocols, leading to the explosion and subsequent oil spill. It also failed to adequately contain the spill and mitigate its environmental impact, using toxic dispersants that harmed marine life and human health (Kassinis & Panayiotou, 2018). McGuire et al. (2022) underscore that BP’s lack of preparedness and safety measures, inadequate response to the spill, and attempts to downplay the severity of the disaster demonstrated a disregard for environmental and human safety. BP’s actions also undermined public trust in the company and its commitment to CSR (McGuire et al., 2022). The issues surrounding the incident also exposed BP’s disregard for environmental ethics, which recognize the intrinsic value of the environment and the importance of preserving it for future generations, thus requiring businesses to reduce their environmental impact and promote sustainability (Alm & Brown, 2021).
The spill had devastating social impacts, as many people lost their jobs or were forced to relocate (Schwartz, 2020). Additionally, the climate change issue also becomes important when evaluating BP’s social and environmental impacts. As one of the world’s largest oil and gas companies, BP significantly impacts the climate (Adejola & Iledare, 2021). Kapranov (2018) observes that the company has been criticized for contributing to greenhouse gas emissions, a leading cause of climate change. Its impact on the climate has significant social and environmental implications. Climate change leads to rising sea levels and extreme weather conditions, which can negatively affect communities and ecosystems worldwide (Nyambuu & Semmler, 2020). Despite BP’s efforts to reduce its carbon footprint, the company still has a long way to go in achieving sustainability. However, it is important to note that BP has taken steps towards renewable energy sources, such as wind and solar power, which could help reduce its impact on the climate.
To become more ethical and sustainable, BP needed to prioritize the ethics of utilitarianism, which require that individual or business actions and decisions should promote the greatest amount of good or well-being for the greatest number of people. From a utilitarian perspective, BP’s actions were unethical because they caused harm to a large number of people and reduced overall happiness (Budolfson et al., 2021). A utilitarian perspective would entail promoting the well-being and interests of all stakeholders, including the environment, local communities, shareholders, and employees (Budolfson et al., 2021; Gesang, 2021). It involves investing in renewable energy sources, reducing carbon emissions, and implementing better safety practices to prevent future accidents.
As mentioned earlier, the company recognizes that investing in low- and zero-carbon energy sources will be instrumental in abating greenhouse emissions and reversing or (at least) halting anthropogenic climate change (Nyambuu & Semmler, 2020). Therefore, investing in these technologies presents the most ethical path for BP to follow. This would benefit the environment and create new job opportunities and contribute to a more stable energy supply. Additionally, BP could prioritize safety measures in its operations to minimize the risk of accidents that could harm employees or nearby communities. By considering the well-being of all stakeholders, BP can make decisions that create the greatest good for the greatest number of people.
The Role of Stakeholders and Proposed Solution(s)
BP recognizes that stakeholder engagement is crucial in developing and implementing its strategy for responsible and ethical business practices (Doni et al., 2021). The company engages with various stakeholders to understand their expectations and concerns and ensure their views are considered in decision-making. The principles of transparency, accountability, and inclusiveness guide BP’s engagement with stakeholders supported by various communication channels, such as social media, public forums, and consultations (Khojastehpour & Shams, 2020). Additionally, the company works closely with its stakeholders to ensure its operations are conducted responsibly and ethically (Doni et al., 2021). For example, it engages with the communities near its operations to understand their concerns and to develop programs to address their needs. BP has also established partnerships with suppliers to ensure they meet the company’s standards for responsible sourcing and ethical conduct. In addition, BP engages with governments and NGOs to promote policies and ...